Elements Development of Jacksonville LLC gets another 90 days to complete deal.
A proposed sale of JEA’s Downtown Southbank property now might include the city.
Developer Peter Rummell has been negotiating for three years to buy the 30-acre site to develop The District, but the JEA has granted delays in completing the contract.
On Tuesday, the JEA board of directors granted a third delay but also will allow Elements Development of Jacksonville LLC, led by Rummell, to assign the contract to the city of Jacksonville and the Downtown Investment Authority.
“Subsequently the whole development agreement will be worked out between the city and us,” JEA CEO Paul McElroy told the board.
It’s unclear what the city’s involvement would be.
The board agreed to amend a 2015 purchase and sale agreement between it and Elements Development of Jacksonville LLC, giving the company another 90 days to close on the $18.5 million purchase of the 30-acre site.
The parties now have until March 30 to come to terms and July 16 to close on the sale.
Rummell, managing partner of Elements Development of Jacksonville LLC, and Michael Munz, an executive at the Dalton Agency, have been negotiating to buy the property to develop it as a health-focused, mixed-used development.
Essentially, the land purchase will be tied to a separate economic development agreement being negotiated between Elements and the DIA.
Details of the transaction, including any possible financial cost to the city, are still being worked out, McElroy said.
He added that the city would need to answer any further questions about its involvement.
“Any proposal on this property will be evaluated by the city if it passes through the DIA, which is the appropriate authority,” said city spokeswoman Marsha Oliver. “All inquiries should be directed to the DIA.”
In a statement, DIA Executive Director Aundra Wallace said negotiations are ongoing.
“No agreements have been reached by the parties for the assignment of the contract to purchase the land nor have terms been agreed to for a redevelopment agreement,” Wallace said.
Rummell did not return a call.
JEA Board Chair Alan Howard said the board initially was concerned about approving another extension, but thought it was the best move to keep the deal alive.
Howard declined to speculate about the city’s involvement.
“We are not a party to those discussions at this point in time,” he said. “We’re not at the table with Elements, the city or the DIA.”
The extension will result in Elements forfeiting a $250,000 deposit it paid the JEA when contract negotiations began.
If the deal had been completed as originally scheduled, the money would have been credited toward the purchase price of the land.
If the deal failed, Elements would have been refunded the money.
“We thought it was a necessary step to protect the integrity of the bidding process,” Howard said.
He said he believed this third extension would be the last the board would approve.
“This contract terminates on March 30, and if they can’t conclude their transaction with the city at that time, we’ll go back to market and try to turn that asset into cash for the citizens of Jacksonville,” Howard said.
City Council member Matt Schellenberg, who serves as the council liaison to the publicly owned utility, expressed his concerns to the board, saying “three years is long enough.”
After the meeting, Schellenberg said he was not only unhappy with the latest extension, but “baffled” about the city’s involvement in the land sale.
He said a conversation Monday night with McElroy did little to answer his questions.
“I respect Paul McElroy, but when I asked him about this, he had no term sheets or any idea of how it was going to work or if the city would pay for this land in cash,” he said.
Schellenberg said the best move may be moving on from Elements altogether.
“They’ve had three years, more than sufficient time for other developers with the financial resources to close on this deal,” he said.
According to the last extension approved in October, Elements was to close on the deal by Dec. 29.
“Since they apparently can’t close by the end of December, I think that we should give other people the opportunity to look at it,” Schellenberg said.
JEA’s Southside Generating Station previously occupied the site.
The District would transform the vacant property into a mixed-use development that could include 150,000 square feet of retail, 200,000 square feet of office space, a marina, greenspace, up to 1,100 residences and a hotel.
The development would “inspire and promote a healthy lifestyle” for people wanting to live near Downtown with integrated outdoor activities and access to the riverfront.
On Monday, Elements announced it had secured a hotel partner for the project, AC Hotel by Marriott.
The proposed 200-room hotel is a midrise concept of about 70,000 square feet. It would be owned, managed and developed by Tampa-based Impact Properties, according to a news release.
The details of the agreement were not provided.